The International Monetary Fund (IMF) has issued a stern advisory to Ghana, urging the country to remain hard-and-fast in adhering to the conditions of its bailout programme.
The call comes amidst discussions concerning potential engagements with the IMF to address an anticipated revenue shortfall resulting from the planned suspension of the Value Added Tax (VAT) on electricity.
Abebe Selassie, the Director of the African Department at the IMF, emphasized the importance of Ghana staying the course of its fund programme, highlighting that adherence to agreed-upon austerity measures is crucial for navigating the economic challenges facing the nation.
“Going forward, it would be really, really important that Ghana continues to implement the program that they have developed as envisaged. These programs are designed to be implemented over three, four years. And it is important that Ghana sticks to the course and sees the program being implemented over the next three years,” stated Selassie during discussions in Washington, DC.
The IMF’s counsel comes in the wake of the release of the $600 million second tranche of the bailout package, aimed at providing budget support and stabilizing the local currency. This brings the total disbursement to $1.2 billion out of the $3 billion approved under the three-year extended credit facility initiated in May 2022.
Assessing Ghana’s performance under the programme, the IMF acknowledged positive strides, noting that reforms are yielding results and signs of economic stabilization are emerging.
“Ghana’s program is being implemented effectively. We just went to the board recently with the first program review…the official creditors are signaling that they will provide debt relief, consistent with what Ghana needs,” added Selassie.
The next IMF program review for Ghana is slated for June 2024, with expectations for the disbursement of the third tranche amounting to approximately US$360 million.